The German sports giant believes the rise of India's 1.1 billion population, which is expected to surpass China as the world's largest in the next decade, is an opportunity to persuade aspirational Indian villagers to trade their plastic chappals or flip-flops for one of the world's most iconic brands.

The idea was inspired by Mohammad Yunus, the Nobel Prize-winning founder of the Grameen microfinance bank in Bangladesh, but the company now believes his plan to sell the world's cheapest trainers has more chance of success in India.

The $1 trainers will be the latest in a growing trend which increasingly sees the world's poor as a potentially lucrative market rather than a begging bowl for aid.

In the past few years mobile phone companies like Vodafone and India's Reliance have had great success selling cheap mobile phones to rickshaw-pullers and roadside hawkers throughout India, while Tata, which owns Jaguar Land Rover, launched the world's cheapest car.

The Tata Nano was launched as the world's cheapest car for 'One Lakh' rupees or around £1200, and aimed to persuade families travelling five to a motorbike to trade up.

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The company followed the model with India's cheapest water purifier and the country's lowest cost apartments.

Adidas had originally planned to launch its venture in Bangladesh but switched to India after a pilot project lost money. The company's boss Herbert Hainer blamed high import taxes and the firm's lack of presence in the country for the failure.

He is banking on the foothold Adidas's subsidiary Reebok has in India to keep production and distribution costs low. He believes in India, the firm can sell its trainers for $1 and still make money.

"The shoe will be sold in villages through a distribution network. We want the product to be self-funding," he said.